In a recent study by the International Foundation of Employee Benefit Plans with the Wall Street Journal, more employers plan to keep health benefits amid changes in 2014. Out of the 593 responses, 54.6% “definitely will” keep coverage, and only 1.1% “definitely won’t.”
For those organizations that are still in between, decisions need to be in place well before this Fall, when most employers are up for their benefits renewal. As we’ve discussed in earlier posts, there is much to consider in regards to an organization’s decision to ‘play or pay.’ Food for thought includes the impact your decision will have on recruiting and retention, tax advantages of employer-sponsored coverage, compensation, and employee morale.
Some employers may see costs increase as employees that waived coverage in the past decide to take it this year because of the individual mandate. Preparing for a change such as this will require creativity on the part of the insurance agent and strategic planning by the employer.
Other cost increases may occur due to the 50 full-time or full-time equivalent regulation that dictates, in part, the employer shared responsibility payment.
But some employers will drop coverage, send their employees to the exchange, and still save money. However, they must also weight the possible downsides of doing so including employee morale and recruitment challenges, operational headaches, public image and loss of tax advantages of employer-provided coverage.
The bottom line is, even as most employers plan to keep their employer-sponsored plan, there are still decisions to be made and issues to address. Proper planning and the right advice will ease the transition.
What do you think the future of employer-sponsored plans will look in the post-2014 individual market?
For assistance in planning for Health Care Reform:
- Are you an AFG client? Contact your dedicated Account Manager or Dean Austin at 248-594-5550.
- New to AFG? Contact Lauren Simonetti or Dean Austin at 248-594-5550.
